The Bank of Japan has unveiled its latest effort to kickstart the country’s
economy with a fresh $138bn (£86bn) programme of monetary easing as it
warned that growth was slowing.

The BoJ, which also said it would provide new loans to banks, had been under pressure from politicians calling for urgent action, as more data indicated a post-disaster recovery is stalling because of the global slowdown and strong yen.

Official data showed factory output was weaker than expected in September, after the country recently posted its worst September trade figures in more than 30 years, as a territorial dispute with China hit exports.

The BoJ said it would expand an asset-purchase programme – its main policy tool – by 11 trillion yen (£86bn) to 91 trillion yen, while keeping rates unchanged at between 0pc and 0.1pc.

Tokyo’s benchmark Nikkei 225 index, which has been rising in recent weeks on expectations of new measures, tumbled on the news while the yen rebounded against the dollar after losing ground over the past week. The BoJ’s move was its second since central banks in the US and debt-hit Europe announced huge policy easing measures in September to stoke growth.

The programme is aimed at injecting liquidity into markets through purchases of government and corporate bonds, and commercial paper, with the latest move aimed squarely at countering a slowing global economy.